We apply the new formulation of heavy quark effective field theory (HQEFT) to the inclusive decays of bottom hadrons. The long-term ambiguity of using heavy quark mass or heavy hadron mass for inclusive decays is clarified within the framework of the new formulation of HQEFT. The 1/m(b) order corrections are absent and contributions from 1/m(b)(2) terms are calculated in detail. This enables us to reliably extract the important CKM matrix element \V-cb\ from the inclusive semileptonic decay rates. The resulting lifetime ratios tau(B-s(0))/tau(B-0) and tau(Lambda(b))/tau(B-0) are found to well agree with the experimental data. We also calculate in detail the inclusive semileptonic branching ratios and the ratios of the tau and beta decay rates as well as the charm countings in the B-0, B-s(0) and Lambda(b) systems. For B-0 decays, all the observables are found to be consistent with the experimental data. More precise data for the B-0 decays and further experimental measurements for the B-s(0) and Lambda(b) systems will be very useful for testing the framework of new formulation of HQEFT at the level of higher order collections.